Lots of folks make offers on for sale by owner homes, but lack the ability, or knowledge, to secure adequate financing to successfully close the transaction. This can tie-up your property for months and you may miss the "right" buyer. It is always necessary to verify a potential buyer's ability before accepting a purchase agreement. Usually the buyer will have what we call a "pre-qualification letter" from a lender. But, you must read them carefully to make certain they are meaningful and not filled with all sorts of "conditions". It is always appropriate to ask the buyer how much will they be using as a down payment, where is that amount currently located and what lender will they be using.. And then verify this information in as many ways as you can.
This is an extremely important issue. If a buyer has not spoken with a lender, you should make that a condition for the buyer to accomplish within the next three days. (This can be included in your purchase agreement.) You don't want to have your home off the market for a long time while a potential buyer is trying to figure out a financing program. Also....watch out for the phrase "We already have a pre-qualification letter for our mortgage." most of those pre-qual letters aren't worth the paper they're written on. Also, once you sign the offer, the Buyer has you "locked up" until closing. This means that even if they haven't gotten financing, you can't accept offers from someone else. I make it a point to verify each letter with the bank, and discuss it in detail. If I can control who the buyers are using for their mortgage, I can usually get them an unconditional commitment within 48 hours.
Better yet is the old, "We don't have a home to sell, our home is Sold!" Well that's great, but what exactly does that mean? Is their old home closed already with the money in the bank? Is it 'on deposit' waiting to close? If so, has "their buyer" been approved for financing? Does their buyer have to close on another home first? If so is their buyers buyer qualified and approved? Not pre-approved...., but APPROVED APPROVED!!! Hey you are putting yourself at the bottom of a huge pile of dominos and if your buyers buyers buyers buyer gets hit by a truck YOU are going to be left holding the bag. Be careful!! I have been told hundreds of time, "we don't have to sell our home" only to find out 99% of the time that they really do. It is VERY rare for a Buyer to be able to purchase without selling their home first. Every once in a while, I'll meet someone like that...but most often, they THINK they don't need to sell it...but they're wrong. Even in cases where they don't need to sell first, Buyers often get really "squirrelly" in the third or fourth week of the deal when the old home hasn't sold. Then they start looking for any and every way to back out of the deal. Think you'll get to keep their deposit if they walk away?? Good luck... It'll be in court for 3 years before the money goes anywhere..... In the meantime though, the house is tied up.